Today’s Risk Is Higher, Not Lower Than 2009

Posted at 6:00 PM (CST) by & filed under General Editorial.

My Dear Extended Family,

Bails-ins do not require a crisis to occur and can surface one bank at a time, spread out over years.

Too big to fail is no longer valid at all.

Those that are not already international will find it very difficult to navigate the hoops that must be crossed for a Westerner to open an account anywhere internationally. For those that cannot think internationally, think very local, smaller local banks that have not taken bail-out or TARP money.

Gold is for saving, especially now at these extremely discounted price. Gold is no problem now as it will trade to new highs.

The major situation is deposits above insurance levels in banks too big to fail. Those deposits are directly in harm’s way.

The next situation is your retirement accounts as targets for the IMF and governments to secure as fonts of capital into which to place sovereign paper.

The following situation is the FDIC itself which is not capitalized to insure the huge amounts of deposits it has undertaken from one to $250,000.

The idea that you can have multiple FDIC insured accounts at $250,000 and collect on all of them is a pure gamble on the goodness of the government’s interpretation.

To be convinced that SIPC can insure all the securities that they hold themselves out to do in a systemic problem is absolutely foolish and total nonsense.

The idea that the FDIC or SIPC will pay in cash is total madness in a systemic crisis. They will pay in special issue US Treasury instruments that will be salable only over a specific amounts of years, more than likely five years.

The chances of a systemic crisis have risen since 2009, not lessened because of the dependency of the Western world economy on constant QE plus accumulated QE.

The risk is higher than in 2009, not less in 2013/2014.

Sincerely yours,
Jim